Allstate has said it saw estimated catastrophe losses throughout May of $436m, or $344m after tax.
According to the insurer, its May catastrophe losses included 14 events, primarily wind and hail in Texas, the Midwest and Canada, estimated at $423m, plus unfavourable reserve reestimates for prior period events. Catastrophe losses for April and May totalled $752m, pre-tax.
Mario Rizzo, chief financial officer of Allstate, said: “Allstate continued to implement meaningful rate actions in response to ongoing inflationary impacts on auto insurance severities. During the month of May, the Allstate brand implemented rate increases of 9.3% across 13 locations, resulting in total Allstate brand insurance premium impact of 0.7%.”
He added: “We have implemented 78 rate increases averaging approximately 8.1% across 49 locations since the beginning of the fourth quarter 2021. Allstate brand implemented auto rate increases totalled $180m in the month of May and $343m quarter to date, after implementing $1.6bn in the previous two quarters.”
The firm had reported April cat losses of $316m back in May, or $250m after tax. The company said that catastrophe losses in April included fourteen events, primarily wind, hail and tornadoes in Texas and the southeast – estimated at $299m, plus unfavourable reserve re-estimates for prior period events.
Allstate’s catastrophe losses for the month of April continue to grow, compared to March’s, which the company estimated at $227m or $179m, after-tax.
It was also in May that Allstate expanded its per-occurrence Nationwide Excess Catastrophe Reinsurance programme for 2022-2023 to provide coverage up to $6.614bn of losses, less a $500m retention.
In Q1 2022, Allstate completed the renewal of some of its catastrophe reinsurance placements for 2022-2023, specifically its Nationwide Excess Catastrophe Reinsurance tower.
For the year ahead, the programme provides coverage up to $6.614bn of loss less a $500m retention, whereas the 2021-2022 placement provided coverage up to $5.763bn of loss, with the same retention for Allstate. This means that Allstate has secured an extra $851m of reinsurance capacity for this programme for 2022-2023 when compared with the previous year.
Unsurprisingly, given hardening market conditions and the larger placement, Allstate’s Q1 catastrophe reinsurance spend amounted to $144m, compared with $113m in the first-quarter of 2021.
